Welcome to 2022!
The year is off to a new start and 2022 has arrived with plenty of action. Russia is potentially going to invade Ukraine, volcanoes are making historic eruptions, and supply chains remain under pressure. What does all this mean for gold?
Year over year inflation in the U.S. just recently printed at 7% – which is the highest since 1982! Central banks have been telling us over and over that it’s just “transitory” but the reality is food, energy, housing, and basically everything else we use in our lives is going up in price.
Gold spent all of 2020 trading in a range and is currently about $1,820 USD per ounce. The chart below shows the price history over the last 5 years.
We are frequently asked why gold hasn’t gone up significantly in price. The answer is that it has and just depends on the time frame you view it. When we look at gold overlaid with the growth in the U.S. M2 money supply figures, we can see the obvious relationship between money printing and gold price. Below is a chart showing M2 money supply growth since 1971.
It seems nearly impossible to comment on gold without commenting on bitcoin because there is a widely held view that bitcoin is the sexier more modern version of gold. Bitcoin is not a viable payment network and never has been. It relies on ever greater marketing efforts, and energy, just to stay in place. We can see that bitcoin trades more like a risk asset than as a currency. In the chart below we compare the popular growth tech ETF ARKK (blue line) to bitcoin (red line). As speculation in tech increases money flows into bitcoin, as money withdraws from the sector bitcoin declines.
The company’s #1 priority is it’s legal defense. Coro is a financial institution and trust is our most important financial pillar. We remain focused on protecting the company’s reputation and best interests of all shareholders.
While litigation can be a lengthy process our management team has been preparing a development roadmap for the next 5 years. It remains our view that physical gold will be growing within the international financial system as money and thus the demand for frictionless transactions will rise exponentially. One of our company’s greatest strengths has been our focus on infrastructure. There are many fintech companies that make pretty mobile apps but the opportunities of the future are based on replacing complex and out of date infrastructure. Coro’s team has always excelled in understanding these complexities and sees financial infrastructure as a service as an enormous opportunity and competitive advantage.
We’ll leave you today with a quote from Naval that was shared with us by a Coro shareholder this week.
“Play long-term games with long-term people. All returns in life, whether in wealth, relationships, or knowledge, come from compound interest.”
This is a beautiful quote and aligns with our vision. Every company goes through its peaks and valleys and we’re certainly traversing through a valley right now. But we have good people, good tech, good shareholders, and a shared view of building a company that makes a better future. Compounding the good over the long-term is unbeatable. Thank you for taking this journey with us.
Co-Founder & CEO